Ivanhice Corgoration is considering purchasing a new delivery truck. The truck has many advantages over...
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Ivanhice Corgoration is considering purchasing a new delivery truck. The truck has many advantages over the connpany scuirrent truck costs; and increased fuel economy, the new truckis expected to generatecost sawings of $7.800. At the end of 8 years, the company Will sell the truck for an estimated $28.200. Traditionully the company has used arule of thumb that a proposal shocild not be accepted unless it has a payback period that is less than 50 S of the asset's estimated useful fife. Larry Newton, a new manager, has suagested that the compary should not rely solety on the paryback approuch, but should also emiploy the not presant vatue method when evaluating new projocts. The compary's cost of capital is 8x. Click here to view the factor table. (a) Consute the cash payback period and net present value of the proposed investment. (for the net pruent value is nogative, use either a
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